DHS awards $36.8M IT services contract to Booz Allen Hamilton, raising value-for-money questions

Contract Overview

Contract Amount: $36,810,951 ($36.8M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Homeland Security

Start Date: 2008-08-11

End Date: 2012-07-16

Contract Duration: 1,435 days

Daily Burn Rate: $25.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: OFFICE OF EMERGENCY COMMUNICATIONS PROFESSIONAL SUPPORT SERVICES.

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $36.8 million to BOOZ ALLEN HAMILTON INC for work described as: OFFICE OF EMERGENCY COMMUNICATIONS PROFESSIONAL SUPPORT SERVICES. Key points: 1. Contract awarded via full and open competition, suggesting a competitive process. 2. The contract duration of 1435 days (nearly 4 years) indicates a significant, long-term need for services. 3. The Time and Materials pricing structure can pose a risk for cost overruns if not closely managed. 4. The specific IT services procured fall under custom computer programming, a critical area for agency operations. 5. The contract's value is substantial, warranting scrutiny of its efficiency and effectiveness. 6. The agency is the Department of Homeland Security, a high-profile entity with diverse IT needs.

Value Assessment

Rating: fair

The contract's value of $36.8 million over nearly four years for custom computer programming services requires careful benchmarking. Without specific details on the deliverables and the labor mix, it's challenging to definitively assess value for money. However, the Time and Materials (T&M) pricing model, while flexible, can lead to higher costs compared to fixed-price contracts if not managed diligently. Comparing this to similar IT support contracts within DHS or other federal agencies would be necessary for a more precise valuation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of two bids suggests a moderate level of competition for this specific requirement. While competition is generally positive, the exact number of potential bidders and the specific evaluation criteria would provide more insight into the intensity of the competition and its potential impact on pricing.

Taxpayer Impact: A full and open competition, even with only two bidders, generally provides a better opportunity for price discovery and can lead to more competitive pricing for taxpayers compared to sole-source or limited competitions.

Public Impact

The Office of Emergency Communications within DHS benefits from these professional support services, enhancing its operational capabilities. The services delivered are custom computer programming, crucial for developing and maintaining specialized IT systems. The geographic impact is primarily within Virginia, where the agency's operations are likely centered. The contract supports the federal workforce by engaging a contractor for specialized IT functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to Time and Materials pricing structure.
Limited competition with only two bids could indicate potential for higher prices than a more robust competition.
The long duration of the contract may lead to vendor lock-in if not managed proactively.

Positive Signals

Awarded through full and open competition, ensuring a broad solicitation process.
The contractor, Booz Allen Hamilton, is a well-established firm with significant federal contracting experience.
The contract addresses a critical IT support need for the Department of Homeland Security.

Sector Analysis

This contract falls within the Information Technology sector, specifically custom computer programming services. The federal IT services market is vast, with agencies consistently investing in software development, system integration, and IT support to maintain and modernize their operations. Benchmarking this contract's value would involve comparing it to similar custom programming service contracts awarded by federal agencies, considering factors like labor rates, project complexity, and contract duration.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a small business set-aside. The primary contractor, Booz Allen Hamilton, is a large business, and their subcontracting practices would need to be assessed separately to understand any potential impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's internal contracting and program management offices. The Inspector General's office for DHS would have jurisdiction to investigate any potential fraud, waste, or abuse. Transparency would be enhanced through contract award data availability and regular performance reporting by the contractor.

Related Government Programs

DHS IT Support Services
Custom Software Development Contracts
Professional Services Contracts
Federal IT Modernization Programs

Risk Flags

Time and Materials Pricing
Moderate Competition Level
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $36.8 million to BOOZ ALLEN HAMILTON INC. OFFICE OF EMERGENCY COMMUNICATIONS PROFESSIONAL SUPPORT SERVICES.

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON INC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $36.8 million.

What is the period of performance?

Start: 2008-08-11. End: 2012-07-16.

What specific custom computer programming services were delivered under this contract, and how did they align with the Office of Emergency Communications' mission?

The contract, awarded to Booz Allen Hamilton, was for 'OFFICE OF EMERGENCY COMMUNICATIONS PROFESSIONAL SUPPORT SERVICES.' While the specific nature of 'custom computer programming services' is not detailed in the provided data, it generally encompasses the design, development, implementation, and maintenance of specialized software applications and systems tailored to meet unique organizational requirements. For the Office of Emergency Communications (OEC) within DHS, these services could have involved developing or enhancing communication platforms, data management systems for emergency response coordination, cybersecurity tools, or analytical software to support emergency preparedness and incident management. The alignment with the OEC's mission would depend on whether these custom programs directly contributed to improving the nation's readiness, response, and recovery capabilities for emergencies and disasters.

How does the Time and Materials (T&M) pricing structure for this $36.8 million contract compare to industry best practices for custom programming services?

Time and Materials (T&M) contracts are often used when the scope of work is not clearly defined or is expected to evolve. For custom computer programming, T&M can offer flexibility, allowing the government to adapt to changing requirements without formal change orders. However, it carries a higher risk of cost overruns because the final price is not fixed. Industry best practices often favor fixed-price contracts for well-defined projects to ensure cost certainty. When T&M is used for programming, robust oversight, detailed tracking of labor hours and material costs, and clear ceiling prices are crucial. The benchmark for 'best practice' would involve comparing the effective hourly rates paid under this contract against market rates for similar skill sets and the level of oversight applied to prevent scope creep and ensure efficiency.

Given the $36.8 million value and nearly four-year duration, what are the key performance indicators (KPIs) that should have been tracked to ensure successful delivery and value for money?

For a contract of this magnitude and duration focused on custom computer programming, key performance indicators (KPIs) should have been established to measure success and ensure value. These might include: 1. **Schedule Adherence:** Timeliness of project milestones and overall delivery. 2. **Quality of Deliverables:** Measured through testing, user acceptance, defect rates, and adherence to coding standards. 3. **Cost Control:** Monitoring actual labor hours and material costs against budgeted amounts, especially crucial for T&M contracts, and ensuring the total cost does not exceed the contract ceiling. 4. **Technical Performance:** Functionality, reliability, security, and performance efficiency of the developed software. 5. **Customer Satisfaction:** Feedback from end-users and stakeholders on the usability and effectiveness of the delivered solutions. Tracking these KPIs would provide objective data to assess contractor performance and the overall value derived from the investment.

What is the historical spending pattern for similar custom computer programming services within the Department of Homeland Security?

Analyzing historical spending patterns for custom computer programming services within DHS is essential for context. While the specific data for this contract shows $36.8 million awarded to Booz Allen Hamilton from 2008-2012, a broader analysis would involve examining DHS's total expenditure on similar services over multiple fiscal years. This would reveal trends in contract values, the number of awards, dominant contract types (e.g., T&M vs. fixed-price), and key contractors. Understanding these patterns helps determine if the $36.8 million award is typical, unusually high, or low for DHS's needs in this area. It also informs whether spending has increased or decreased, potentially indicating shifts in IT strategy, modernization efforts, or efficiency gains/losses.

What are the potential risks associated with Booz Allen Hamilton's track record in delivering custom computer programming services for federal agencies?

Booz Allen Hamilton is a large, established federal contractor with extensive experience across various domains, including IT services. Their track record generally indicates a capacity to handle complex projects. However, risks can still exist. For custom computer programming, potential risks associated with any large contractor include challenges in accurately estimating project timelines and costs, managing scope creep, ensuring the security of developed code, and adapting to rapidly changing technological landscapes. Specific risks for this contract might relate to the contractor's performance on previous OEC or DHS projects, any past performance issues noted in contract databases (like CPARS), or the specific team assigned to this task. A thorough review would involve examining past performance evaluations and any documented issues or successes on similar engagements.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation (UEI: 964725688)

Address: 8283 GREENSBORO DRIVE, MCLEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $40,550,834

Exercised Options: $36,810,951

Current Obligation: $36,810,951

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HSHQDC06D00031

IDV Type: IDC

Timeline